Is Quantitative Easing the Last Gasp Bubble?

Syracuse great Don McPherson shared an awesome quote with me during his visit to the ‘Ville yesterday.

When he speaks to student athletes, he asks them if they know the difference between a million and a billion. He then shares a different lens to prove his point: “One million seconds is twelve days. One billion seconds is 32 years.”

Yesterday, Ambrose Evans-Pritchard, International Business Editor of the UK Telegraph, reported that key members of the Federal Reserve five-man Board are quietly mulling a fresh burst of asset purchases, potentially pushing the Fed’s balance sheet towards an eye-popping $5 trillion.

Five trillion! To put the magnitude of the number into perspective, I’m gonna borrow a page from the talented #9. Five trillion seconds is 158,445 years, which is almost as old as Grandpa Neil Glassman!

Is it conceivable that we’re In Too Deep? Is the only realistic strategy is to continue pumping the patient full of drugs, pushing risk down the road, and hoping against hope that something — anything — comes along in the next few years to magically save the system from imploding under the weight of a synthetically structured world?

It’s possible; akin to a liar who continues to fib, digging himself into a deeper and deeper hole until the world awakes to his true nature, policymakers may have no choice but to throw good money after bad at the cumulative imbalances and toxic assets that loom large beneath the surface.

That, of course, opens the door to the “other side” of a potential binary outcome, one we’ve discussed through the years in the articles below: